Stocks – The only way to Invest?

Why does spam continue to roll into our in-boxes? Why do credit card offers continue to be my #1 source of junk mail? Because they work. People keep clicking (the spam) and applying for credit cards (the junk mail).

The same can be said for investments. The stock market gets battered but money pours in. Why? Because it works. Someone is making money or nobody would be doing it. But is the stock market the only place to send our hard earned cash? Of course not. There are alternatives.

What about self-storage buildings, cell towers, and parking facilities? Well, according to a recent Wall Street Journal article…

Such unglamorous niches, once shunned by the investing elite, are performing well in 2010, even as the Dow industrials limp along.

Why haven’t we, the middle investor class, heard of these investments yet? My first inclination is that we’ve been spoon fed by financial “experts” and mutual fund companies for so long that these types of investments are too weird. Cell tower? For real?

Or, it may be because the big money is getting there first.

In some cases, private-equity firms, pensions and college endowments, which are cutting their exposure to stocks, are looking into these and other offbeat investments.

Before you get too excited, these types of investments aren’t the same as trading stock online. They’re physical properties.

In general, these offbeat commercial-real-estate ventures should be viewed as long-term holdings, not short-term flips—and as alternatives to dividend-paying stocks and bonds.

But for income-oriented investors willing to put in the leg work, these properties can generate annual returns of 5% to 9%, say experts. In some cases, they also confer tax advantages.

One of the more interesting investments? Railroad rights-of-way.

Brent Hayes thought so. Mr. Hayes says he has amassed a fortune of more than $17 million in part by buying abandoned rail lines from CSX Corp.

Mr. Hayes improved the properties he bought by removing the railroad ties. He mostly sells the land to investors and keeps some for his own development. Hmm. Who would of thunk it?

Read more about these alternative investments.

4 Responses to “Stocks – The only way to Invest?”

  1. Cheryl @ Swap Savers September 13, 2010 at 1:10 pm #

    Great article. Thanks for sharing some other ways to invest money.

  2. Jesse September 13, 2010 at 2:32 pm #

    I love hearing about off-beat investments, and off-beat ideas in any respect for that matter. Just like Lending Club and the like were shunned when they were first envisioned, they are now a growing and profitable investment vehicle.

  3. Jerret September 13, 2010 at 7:19 pm #

    @Cheryl – Thanks for reading. Glad you enjoyed the article.

    @Jesse – I’m the same way, to my detriment sometimes. I think most people just look at the stock market for wealth building. Even having a small business is an investment.


  1. Do You Invest With Your Mind or Your Moral Compass? | Personal Finance Firewall - September 16, 2010

    […] you would use and that sell products that you buy, but recently I was reading this article by Budget Snob about unconventional investments that paid off, and I realized that Buffet wasn’t […]